Deduct TDS while receiving payment.

samsungsamsung Member Posts: 10
This is regarding TDS in IN version. I am using NAV 2009.
I am trying to create NOD lines for a customer, but while doing so, the system is not looking up at TDS Nature of Deduction, but TCS nature of collection.

I remember that in 4.0, it looked up for TDS nature of deduction.
Please let me know behind the logic of this lookup, and how can I calculate TDS while receiving payment from a customer.

Thanks.
Sam Sung

Comments

  • mohana_cse06mohana_cse06 Member Posts: 5,506
    Difference between TDS and TCS

    TDS is actually a deduction while TCS is a collection of
    tax at source, meaning thereby, if X makes payment of Rs.
    100 to Y and such payment is covered under the provisions
    of tds, then X will have to deduct tds say Rs. 10 and then
    will make payment of Rs. 90 to Y.
    While, if X sells goods worth Rs. 100 to Y and such goods
    are covered under the provisions of tcs, then X will
    collect Rs. 10 more from Y and hence the sale will be for
    Rs. 110.
    In both the cases Rs. 10 will be deposited to govt. account.
    Hope it will clarify the provision a little clear.

    For Customers, we use TCS..why do want to use TDS?

    Previously in 4.0. there were 2 seperate forms for TDS and TCS
    but now we have only 1 form and based on the Type selection at header, it will open TDS or TCS in lines..
    Condition	Table	Field	Table Filter
    Type=CONST(Customer)	TCS Nature Of Collection		
    Type=CONST(Vendor)	TDS Nature of Deduction		
    Type=CONST(Party),TCS Party=FILTER(Yes)	TCS Nature Of Collection		
    Type=CONST(Party),TCS Party=FILTER(No)	TDS Nature of Deduction
    
  • samsungsamsung Member Posts: 10
    Dear mohana_cse06,

    Let me explain you with an example.
    X=Receiver of service and Y=Provider of service.

    X receives invoice from Y and puts entry in his system-
    Service A/c Dr. 100
    Y Cr. 100

    while, Y makes and entry as-
    X a/c Dr. 100
    Income A/c Cr. 100

    Now X pays as-
    Y Dr. 100
    TDS Cr. 10
    Bank Cr 90

    and Y receives as-

    Bank A/c Dr. 90
    TDS Recoverable Dr. 10
    X Cr. 100

    Now how does I set up Y's system to receive Rs. 10 Less?? Anyhow, Rs.10 is the Tax Deducted as source for Y too.

    I may sound wierd as I am not an accountant, and my accountant is not available.
    Thus, appreciate if you could help me in explaining the logic and setup.
  • mohana_cse06mohana_cse06 Member Posts: 5,506
    I am also not a functional consultant
    in your case Y-->X should be TDS and X-->Y should be TCS (as per my above example)

    wait for any functional expert reply..
  • ssinglassingla Member Posts: 2,973
    AFAIK TDS on customer payment is not available since 4.0 SP3. There is a functionality of TDS Certificate receivable which will mark the transaction on which customer is suppose to issue TDS certificate. TDS certificate amount will be updated once the certificate is received and entered in NAV.

    The entry of tds receivable which would normally go to advance tax has to be posted manually.
    CA Sandeep Singla
    http://ssdynamics.co.in
  • DeepDeep Member Posts: 569
    Since the TDS recoverable in your case is like an advance tax deposit as Sandeep explained, you can manually split and post the entry in the system in separate G/L Account. Later on, you can adjust the same G/L balance at the end of year with your company tax on gross profit (PBT).
    Regards,

    Deep
    India
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